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Schaefer v. Allstate New Jersey Insurance Co.

April 15, 2005

CHARLOTTE SCHAEFER, PLAINTIFF-RESPONDENT,
v.
ALLSTATE NEW JERSEY INSURANCE COMPANY, DEFENDANT-RESPONDENT, AND U.S. FIDELITY & GUARANTY CO., DEFENDANT-APPELLANT.
CYNTHIA LEE, PLAINTIFF-RESPONDENT,
v.
U.S. FIDELITY & GUARANTY CO., DEFENDANT-APPELLANT, AND LIBERTY MUTUAL FIRE INSURANCE CO., DEFENDANT-RESPONDENT.
DENISE SOTTILARE, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
v.
OLYMPIA TRAILS BUS COMPANY, OLYMPIA TRAILS, INC., COACH USA AND SEDGWICK CMS, DEFENDANTS, AND USF&G, DEFENDANT-APPELLANT/CROSS-RESPONDENT, AND LIBERTY MUTUAL INSURANCE COMPANY, DEFENDANT-RESPONDENT.



On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-1871-03 (Schaefer, A-5757-03T1); Middlesex County, Docket Nos. L-9183-03 (Lee, A-6668-03T5) and L-5742-03 (Sottilare, A-4478-03T3).

Before Judges Skillman, Grall and Gilroy.

The opinion of the court was delivered by: Skillman, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 15, 2005

The common issue presented by these appeals is whether the medical expense benefits an insurer of a bus company is required to provide a person who is injured while a passenger on a bus must be paid by an automobile insurer that provides personal injury protection coverage to the injured passenger. We conclude that the insurer of the bus company remains solely responsible for the payment of medical expense benefits even though the injured bus passenger is insured under an automobile policy that provides personal injury protection benefits.

Plaintiffs suffered personal injuries in accidents that occurred while they were passengers on buses insured by defendant United States Fidelity & Guaranty Co. (USF&G). Sottilare fell as she was getting off a bus; Schaefer slipped and fell in a bus bathroom; and Lee was injured when the bus in which she was riding was involved in an accident.

At the time of their accidents, plaintiffs were all named insureds under personal automobile insurance policies that provided personal injury protection (PIP) benefits, as required by N.J.S.A. 39:6A-4. The policies that USF&G issued to the owners of the buses in which plaintiffs suffered their accidents provided motor bus passenger medical expense benefits (MEB) coverage, as required by N.J.S.A. 17:28-1.6.

Plaintiffs incurred medical expenses as a result of their injuries and submitted claims for reimbursement to both USF&G and their own automobile insurance companies. In all three cases, both insurers denied coverage, asserting that plaintiffs' claims were covered by the other insurer's policies.

Consequently, plaintiffs were forced to bring these actions against USF&G and their automobile insurers for declaratory judgments as to which insurer's coverage applied to their claims.*fn1 The cases were decided by three separate trial courts. Lee's action was brought before the court by an order to show cause. In the other two actions, the parties filed cross-motions for summary judgment.

The trial courts all determined that plaintiffs were entitled to MEB under the policies USF&G issued to the bus companies and that the PIP provisions of plaintiffs' automobile policies did not provide coverage because the accidents did not occur while plaintiffs were occupying, entering into, or alighting from automobiles. In Lee, the trial court also granted plaintiff's application for counsel fees and costs in the amount of $5448, but in Sottilare the court denied plaintiff's application for counsel fees and costs.*fn2

In each of the three actions, USF&G filed appeals from the trial courts' declarations that it has an obligation to pay MEB for plaintiffs' medical expenses and that plaintiffs' claims are not covered by their automobile policies. In Sottilare, plaintiff filed a cross-appeal from the court's denial of her application for counsel fees and costs. We consolidate the three appeals.

We affirm the declaratory judgments that USF&G is responsible for the payment of plaintiffs' MEB. We reverse the denial of Sottilare's application for counsel fees and costs.

I.

The New Jersey Automobile Reparation Reform Act, N.J.S.A. 39:6A-1 to -35, commonly referred to as the "No Fault Act," requires "every standard automobile liability insurance policy" to provide PIP benefits, which include reimbursement of medical expenses, N.J.S.A. 39:6A-4(a), "to the named insured and members of his family residing in his household who sustain bodily injury as a result of an accident while ...


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